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bond insurers

Despite still-low default rates, munis aren't nearly as solid as they've traditionally been. And thanks to the shrinkage among bond insurers, far fewer bonds are being issued with that extra layer of protection.

Share in financial services company MBIA are up more than 10% in pre-market trading after Fairholme Capital Management, the investment firm headed by Bruce Berkowitz, disclosed that it had purchased an 11.1% stake in MBIA, the world's largest bond insurer.